Top Rio Tinto Execs Fired Over Simandou Payments

Update (11/17/16): On November 16, Rio Tinto decided to not simply suspend, but terminate the contracts with Energy and Minerals Chief Executive Alan Davies and Legal and Regulatory Affairs Group Executive Debra Valentine. The Rio Tinto board concluded that the executives failed to maintain the standards expected of them under its global code of conduct, The way we work. Neither executive will be eligible for any short-term incentive plan awards for 2016. Rio Tinto will also cancel all unvested incentive plan awards from previous years.

Davies will be replaced by Bold Baatar. Baatar joined Rio Tinto in 2013 as Copper International Operations president and is the managing director of Marine and vice president Iron Ore Sales and Marketing.

Rio Tinto Chief Executive J.S. Jacques said, “Appointing Bold to run our Energy and Minerals business will add a fresh perspective to the product group. Bold brings broad international and executive experience in a wide range of commercial disciplines. He has a proven track record and will be a great addition to our ExCo, particularly with his strong strategic approach and acute understanding of Asia.”

Chief Financial Officer Chris Lynch has temporarily assumed accountability for the corporate Legal and Regulatory Affairs function. The recruitment process for a new chief legal counsel has commenced.

On November 9, Rio Tinto announced it had suspended Energy and Minerals Chief Executive Alan Davies over payments made to a consultant on the Simandou project in Guinea.

On August 29, Rio Tinto became aware of email correspondence from 2011 relating to contractual payments totaling US$10.5 million made to a consultant providing advisory services on the Simandou project in Guinea, the company said.

The company launched an investigation into the matter led by external counsel and Rio Tinto notified relevant authorities in the United Kingdom and United States and is in the process of contacting the Australian authorities.

Legal and Regulatory Affairs Group Executive Debra Valentine, who was set to retire on May 1, 2017, has stepped down from her role.

Rio Tinto intends to cooperate fully with any subsequent inquiries from all of the relevant authorities.